Incentives likely for solar panel making, net-metering

The government may provide some incentives to encourage local assembly of solar panels in the budget 2024-25.

Pakistan Solar Association (PSL) Senior VicePresident Mohammad Zakir Ali, who was part of Prime Minister Shehbaz Sharif’s recent delegation to China, said, “I do not think the government will impose any new taxes and duties on solar panels, which already have zero per cent general sales tax. Only inverters carry 18pc GST.”

He said the government has been trying to lure Chinese manufacturers of different products to relocate their units in Pakistan after reports of some restrictions or curbs imposed on China by various countries.

Mr Zakir said that despite the government’s strong commitment to promoting solarisation in the country, “no memorandum of understanding (MoU) had been signed, though multiple agreements had been inked between Chinese and local entrepreneurs in different sectors.”

He was of the view that after a recent hue and cry, the government may not take any negative measures on netmetering, like reducing the power purchase rate from the current Rs21 to Rs12 per unit. He said Chinese investors, in interactions during the visit, had said that Pakistan needed to impose an import duty on the arrival of completely built-up (CBU) solar panels so that the local panel manufacturers could work in a healthy environment.

He added that this would also promote fresh investment in the solar industry. He added that when Chinese companies export to Pakistan or other countries, they get a rebate, which is the same as what they want from Pakistan after investing in the solar sector.

Some solar panel dealers said that the government is unlikely to touch the net-metering issue, which had already forced the government to clarify the situation after multiple media reports regarding the imposition of a fixed tax on citizens who produce energy through solar systems, a cut in the power purchase rate for domestic net-metering consumers, and the replacement of net metering with a gross-metering mechanism.